Attorney with Briskman Briskman & Greenberg Remarks on Insurer’s Suit to Avoid Defense in $25 Million Worker Death Case

Chicago, IL (Law Firm Newswire) February 17, 2014 – An insurance company is suing to avoid defending a worker death lawsuit.

The dispute arises from a wrongful death lawsuit filed by the family of a construction worker who was buried alive in a workplace accident. State National Insurance Company argues that it has no obligation to defend US-Sino Investment Incorporated, the construction company named as a defendant.

State National has filed a complaint in federal court, claiming that it owes no duty of indemnification to US-Sino or the owner, Richard Xin Liu. The 2012 accident killed Raul Zapata Mercado and led regulators to issue a suspension of the company’s contractor’s license.

“Far too many workers are injured or killed on the job all across the country,” observed Robert Briskman, a Chicago work injury attorney. “In the case of a tragic death such as this one, a wrongful death lawsuit may be appropriate to bring some compensation to the family of the victim.”

In January 2012, a 12-foot-deep trench collapsed on Mercado at a Milpitas, California construction site after a three-week period of heavy rain. Mercado’s family filed a wrongful death lawsuit against the company a year later, demanding $25 million, including an award of punitive damages.

In the current case, the insurer has pointed to several exclusions that deny coverage for injury claims by contractors or employees in its commercial liability policy with US-Sino.

Another lawsuit has been brought against US-Sino by the owner of the home where the accident took place, claiming that the company failed to resume work after the accident.

State National argues that its policy excludes coverage for both suits. In addition to the exclusion regarding employee actions, the insurer cited other similar clauses, including one for punitive damages.

The insurer also claims that the policy excludes claims arising from “subsidence,” which includes events such as earthquakes, landslides and other earth movements.

The lawsuit seeks court orders to establish that the two lawsuits do not give rise to an indemnity obligation from State National. The insurer is also seeking reimbursement for costs already incurred while defending the construction company in the litigation.